BRUSSELS – The European Parliament’s Economic and Monetary Affairs Committee has released its draft report on last month’s Solvency II proposal from the European Commission with accompanying amendments.

Parliamentary rapporteur Peter Skinner says Solvency II – the planned directive for capital adequacy regulation for the European Union insurance industry – should follow a “compact approach” for the calculation of the minimum capital requirement (MCR).

The compact approach is described as risk-sensitive, robust, simple to calculate and auditable. Internal market commissioner McCreevy has stressed the importance of a fast-track approach to Solvency II. The draft echoes that desire and has been published on schedule.

There are a number of draft amendments, including for the removal of the €5 million annual premium threshold for the application of the directive in favour of a more general application of the proportionality principle.

Another amendment is for a definition of surplus funds allocated to policyholders that may not necessarily be considered as insurance and reinsurance liabilities, but may cover the Solvency Capital Requirement (SCR) and not the MCR.

The draft also proposes significant changes to the system of co-operation between supervisors involved in group supervision under Title III of the directive, including an enhanced role for the Committee of European Insurance and Occupational Pensions Supervisors.

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